CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ESTONIA AND THE
SWISS FEDERAL COUNCIL FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT
TO TAXES ON INCOME AND ON CAPITALDone on the 11th of June, 2002
in Bern

The Government of the Republic of Estonia and the Swiss Federal Council,

Desiring to conclude a Convention for the avoidance of double taxation
with respect to taxes on income and on capital,

Have agreed as follows:

Article 1. Persons covered

This Convention shall apply to persons who are residents of one or both
of the Contracting States.

Article 2. Taxes covered

1. This Convention shall apply to taxes on income and on capital imposed
on behalf of a Contracting State or of its political subdivisions or
local authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income and on capital all taxes
imposed on total income, on total capital, or on elements of income or
of capital, including taxes on gains from the alienation of movable or
immovable property, as well as taxes on capital appreciation.

3. The existing taxes to which the Convention shall apply are in
particular:a) in Estonia:the income tax (tulumaks);(hereinafter
referred to as “Estonian tax”);b) in Switzerland:the
federal, cantonal and communal taxes(i) on income (total income,
earned income, income from capital, industrial and commercial profits,
capital gains, and other items of income);(ii) on capital (total
property, movable and immovable property, business assets, paid-up
capital and reserves, and other items of capital);(hereinafter
referred to as “Swiss tax”).

4. The Convention shall apply also to any identical or substantially
similar taxes which are imposed after the date of signature of the
Convention in addition to, or in place of, the existing taxes. The
competent authorities of the Contracting States shall notify each other
of any substantial changes which have been made in their respective
taxation laws.

5. The Convention shall not apply to taxes withheld at the source on
winnings from gambling and lotteries.

Article 3. General definitions

1. For the purposes of this Convention, unless the context otherwise
requires:a) the term “Estonia” means the Republic of Estonia and,
when used in the geographical sense, means the territory of Estonia and
any other area adjacent to the territorial waters of Estonia within
which under the laws of Estonia and in accordance with international
law, the rights of Estonia may be exercised with respect to the sea bed
and its sub-soil and their natural resources;b) the term
“Switzerland” means the Swiss Confederation;c) the terms
“a Contracting State” and “the other Contracting State” mean Estonia or
Switzerland, as the context requires;d) the term “person” includes
an individual, a company and any other body of persons;e) the term
“company” means any body corporate or any entity which is treated as a
body corporate for tax purposes;f) the terms “enterprise of a
Contracting State” and “enterprise of the other Contracting State” mean
respectively an enterprise carried on by a resident of a Contracting
State and an enterprise carried on by a resident of the other
Contracting State;g) the term “international traffic” means any
transport by a ship or aircraft operated by an enterprise of a
Contracting State, except when the ship or aircraft is operated solely
between places in the other Contracting State;h) the term “competent
authority” means:(i) in the case of Estonia, the Minister of
Finance or his authorised representative;(ii) in the case of
Switzerland, the Director of the Federal Tax Administration or his
authorised representative;i) the term “national” means:(i)
any individual possessing the nationality of a Contracting State;(ii)
any legal person, partnership or association deriving its status as such
from the laws in force in a Contracting State.

2. As regards the application of the Convention at any time by a
Contracting State, any term not defined therein shall, unless the
context otherwise requires, have the meaning that it has at that time
under the law of that State for the purposes of the taxes to which the
Convention applies, any meaning under the applicable tax laws of that
State prevailing over a meaning given to the term under other laws of
that State.

Article 4. Resident

1. For the purposes of this Convention, the term “resident of a
Contracting State” means any person who, under the laws of that State,
is liable to tax therein by reason of his domicile, residence, place of
management, place of incorporation or any other criterion of a similar
nature, and also includes that State and any political subdivision or
local authority thereof. This term, however, does not include any person
who is liable to tax in that State in respect only of income from
sources in that State or capital situated therein.

2. Where by reason of the provisions of paragraph 1 an individual is a
resident of both Contracting States, then his status shall be determined
as follows:a) he shall be deemed to be a resident only of the State
in which he has a permanent home available to him; if he has a permanent
home available to him in both States, he shall be deemed to be a
resident only of the State with which his personal and economic
relations are closer (centre of vital interests);b) if the State in
which he has his centre of vital interests cannot be determined, or if
he has not a permanent home available to him in either State, he shall
be deemed to be a resident only of the State in which he has an habitual
abode;c) if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident only of the State of which he
is a national;d) if he is a national of both States or of neither of
them, the competent authorities of the Contracting States shall settle
the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than
an individual is a resident of both Contracting States, the competent
authorities of the Contracting States shall endeavour to settle the
question by mutual agreement and determine the mode of application of
the Convention to such person.

Article 5. Permanent establishment

1. For the purposes of this Convention, the term “permanent
establishment” means a fixed place of business through which the
business of an enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes especially:a)
a place of management;b) a branch;c) an office;d) a factory;e)
a workshop, andf) a mine, an oil or gas well, a quarry or any other
place of extraction of natural resources.

3. A building site, a construction, assembly or installation project or
a supervisory activity connected therewith constitutes a permanent
establishment only if such site, project or activity lasts for a period
of more than nine months.

4. Notwithstanding the preceding provisions of this Article, the term
“permanent establishment” shall be deemed not to include:a)
the use of facilities solely for the purpose of storage, display or
delivery of goods or merchandise belonging to the enterprise;b) the
maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;c)
the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;d)
the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise or of collecting information, for the
enterprise;e) the maintenance of a fixed place of business solely
for the purpose of advertising, for the supply of information, for
scientific research or for similar activities which have a preparatory
or auxiliary character for the enterprise;f) the maintenance of a
fixed place of business solely for any combination of activities
mentioned in subparagraphs a) to e), provided that the overall activity
of the fixed place of business resulting from this combination is of a
preparatory or auxiliary character.

5. Notwithstanding the provisions of paragraphs 1 and 2, where a
person – other than an agent of an independent status to whom
paragraph 6 applies – is acting on behalf of an enterprise and has, and
habitually exercises, in a Contracting State an authority to conclude
contracts in the name of the enterprise, that enterprise shall be deemed
to have a permanent establishment in that State in respect of any
activities which that person undertakes for the enterprise, unless the
activities of such person are limited to those mentioned in paragraph 4
which, if exercised through a fixed place of business, would not make
this fixed place of business a permanent establishment under the
provisions of that paragraph.

6. An enterprise shall not be deemed to have a permanent establishment
in a Contracting State merely because it carries on business in that
State through a broker, general commission agent or any other agent of
an independent status, provided that such persons are acting in the
ordinary course of their business. However, where the activities of such
an agent are devoted wholly or almost wholly on behalf of that
enterprise, and where the conditions between the agent and the
enterprise differ from those which would be made between independent
persons, such agent shall not be considered an agent of an independent
status within the meaning of this paragraph. In such case the provisions
of paragraph 5 shall apply.

7. The fact that a company which is a resident of a Contracting State
controls or is controlled by a company which is a resident of the other
Contracting State, or which carries on business in that other State
(whether through a permanent establishment or otherwise), shall not of
itself constitute either company a permanent establishment of the other.

Article 6. Income from immovable property

1. Income derived by a resident of a Contracting State from immovable
property (including income from agriculture or forestry) situated in the
other Contracting State may be taxed in that other State.

2. The term “immovable property” shall have the meaning which it has
under the law of the Contracting State in which the property in question
is situated. The term shall in any case include property accessory to
immovable property, livestock and equipment used in agriculture and
forestry, rights to which the provisions of general law respecting
landed property apply, any option or similar right to acquire immovable
property, usufruct of immovable property and rights to variable or fixed
payments as consideration for the working of, or the right to work,
mineral deposits, sources and other natural resources. Ships and
aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the
direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income
from immovable property of an enterprise and to income from immovable
property used for the performance of independent personal services.

Article 7. Business profits

1. The profits of an enterprise of a Contracting State shall be taxable
only in that State unless the enterprise carries on business in the
other Contracting State through a permanent establishment situated
therein. If the enterprise carries on business as aforesaid, the profits
of the enterprise may be taxed in the other State but only so much of
them as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a
Contracting State carries on business in the other Contracting State
through a permanent establishment situated therein, there shall in each
Contracting State be attributed to that permanent establishment the
profits which it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities under the
same or similar conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall
be allowed as deductions expenses which are incurred for the purposes of
the permanent establishment, including executive and general
administrative expenses so incurred, whether in the State in which the
permanent establishment is situated or elsewhere.

4. Insofar as it has been customary in a Contracting State to determine
the profits to be attributed to a permanent establishment on the basis
of an apportionment of the total profits of the enterprise to its
various parts, nothing in paragraph 2 shall preclude that Contracting
State from determining the profits to be taxed by such an apportionment
as may be customary; the method of apportionment adopted shall, however,
be such that the result shall be in accordance with the principles
contained in this Article.

5. No profits shall be attributed to a permanent establishment by reason
of the mere purchase by that permanent establishment of goods or
merchandise for the enterprise.

6. For the purposes of the preceding paragraphs, the profits to be
attributed to the permanent establishment shall be determined by the
same method year by year unless there is good and sufficient reason to
the contrary.

7. Where profits include items of income which are dealt with separately
in other Articles of this Convention, then the provisions of those
Articles shall not be affected by the provisions of this Article.

Article 8. Shipping and air transport

1. Profits of an enterprise of a Contracting State from the operation of
ships or aircraft in international traffic shall be taxable only in that
State.

2. The provisions of paragraph 1 shall also apply to profits from the
participation in a pool, a joint business or an international operating
agency.

Article 9. Associated enterprises

1. Wherea) an enterprise of a Contracting State participates
directly or indirectly in the management, control or capital of an
enterprise of the other Contracting State, orb) the same persons
participate directly or indirectly in the management, control or capital
of an enterprise of a Contracting State and an enterprise of the other
Contracting State,

and in either case conditions are made or imposed between the two
enterprises in their commercial or financial relations which differ from
those which would be made between independent enterprises, then any
profits which would, but for those conditions, have accrued to one of
the enterprises, but, by reason of those conditions, have not so
accrued, may be included in the profits of that enterprise and taxed
accordingly.

2. Where profits on which an enterprise of a Contracting State has been
charged to tax in that State are also included in the profits of an
enterprise of the other Contracting State and taxed accordingly, and the
profits so included are profits which would have accrued to that
enterprise of the other State, if the conditions made between the
enterprises had been those which would have been made between
independent enterprises, then the competent authorities of the
Contracting States may consult together with a view to reach an
agreement on the adjustment of profits in one or both Contracting States.

Article 10. Dividends

1. Dividends paid by a company which is a resident of a Contracting
State to a resident of the other Contracting State may be taxed in that
other State.

2. However, such dividends may also be taxed in the Contracting State of
which the company paying the dividends is a resident and according to
the laws of that State, but if the beneficial owner of the dividends is
a resident of the other Contracting State, the tax so charged shall not
exceed:a) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company (other than a partnership) which holds
directly at least 20 per cent of the capital of the company paying the
dividends;b) 15 per cent of the gross amount of the dividends in all
other cases.

This paragraph shall not affect the taxation of the company in respect
of the profits out of which the dividends are paid.

3. The term “dividends” as used in this Article means income from shares
or other rights, not being debt-claims, participating in profits, as
well as income from other rights which is subjected to the same taxation
treatment as income from shares by the laws of the State of which the
company making the distribution is a resident.

4. The provisions of paragraphs 1 and 2 shall not apply if the
beneficial owner of the dividends, being a resident of a Contracting
State, carries on business in the other Contracting State of which the
company paying the dividends is a resident, through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and
the holding in respect of which the dividends are paid is effectively
connected with such permanent establishment or fixed base. In such case
the provisions of Article 7 or Article 14, as the case may be, shall
apply.

5. Where a company which is a resident of a Contracting State derives
profits or income from the other Contracting State, that other State may
not impose any tax on the dividends paid by the company, except insofar
as such dividends are paid to a resident of that other State or insofar
as the holding in respect of which the dividends are paid is effectively
connected with a permanent establishment or a fixed base situated in
that other State, nor subject the company’s undistributed profits to a
tax on the company’s undistributed profits, even if the dividends paid
or the undistributed profits consist wholly or partly of profits or
income arising in such other State.

Article 11. Interest

1. Interest arising in a Contracting State and paid to a resident of the
other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in
which it arises and according to the laws of that State, but if the
beneficial owner of the interest is a resident of the other Contracting
State, the tax so charged shall not exceed 10 per cent of the gross
amount of the interest.

3. Notwithstanding the provisions of paragraph 2:a) interest arising
in a Contracting State and paid to a resident of the other Contracting
State who is the beneficial owner thereof shall be taxable only in that
other State if it is paid in respect of a bond, debenture or other
similar obligation of the first-mentioned State or of a political
subdivision or local authority thereof;b) interest arising in a
Contracting State and paid to the other Contracting State or to a
political subdivision or local authority thereof, or to the Central Bank
of that other State, shall be taxable only in that other State;c)
interest arising in a Contracting State and paid to a resident of the
other Contracting State, with respect to loans made, guaranteed or
insured by that other State, a political subdivision or local authority
thereof, or any institution acting on behalf of that other State,
subdivision or authority, shall be taxable only in that other State;d)
interest arising in a Contracting State shall be taxable only in the
other Contracting State if:(i) the recipient is a resident of that
other State, and(ii) such recipient is an enterprise of that other
State and is the beneficial owner of the interest and(iii) the
interest is paid with respect to indebtedness arising on the sale on
credit, by that enterprise, of any merchandise or industrial, commercial
or scientific equipment to an enterprise of the first-mentioned State,
except where the sale or indebtedness is between related persons.

4. The term “interest” as used in this Article means income from debt-
claims of every kind, whether or not secured by mortgage and whether or
not carrying a right to participate in the debtor’s profits, and in
particular, income from government securities and income from bonds or
debentures, including premiums and prizes attaching to such securities,
bonds or debentures. Penalty charges for late payment shall not be
regarded as interest for the purpose of this Article.

5. The provisions of paragraphs 1, 2 and 3 shall not apply if the
beneficial owner of the interest, being a resident of a Contracting
State, carries on business in the other Contracting State in which the
interest arises, through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed
base situated therein, and the debt-claim in respect of which the
interest is paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or
Article 14, as the case may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when the
payer is a resident of that State. Where, however, the person paying the
interest, whether he is a resident of a Contracting State or not, has in
a Contracting State a permanent establishment or a fixed base in
connection with which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent establishment or
fixed base, then such interest shall be deemed to arise in the State in
which the permanent establishment or fixed base is situated.

7. Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the
amount of the interest, having regard to the debt-claim for which it is
paid, exceeds the amount which would have been agreed upon by the payer
and the beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned
amount. In such case, the excess part of the payments shall remain
taxable according to the laws of each Contracting State, due regard
being had to the other provisions of this Convention.

Article 12. Royalties

1. Royalties arising in a Contracting State and paid to a resident of
the other Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State in
which they arise and according to the laws of that State, but if the
beneficial owner of the royalties is a resident of the other Contracting
State, the tax so charged shall not exceed:a) 5 per cent of the
gross amount of the royalties paid for the use of industrial, commercial
or scientific equipment;b) 10 per cent of the gross amount of the
royalties in all other cases.

3. The term “royalties” as used in this Article means payments of any
kind received as a consideration for the use of, or the right to use,
any copyright of literary, artistic or scientific work including
cinematograph films and films or tapes for radio or television
broadcasting, any patent, trade mark, design or model, plan, secret
formula or process, or for the use of, or the right to use, industrial,
commercial or scientific equipment, or for information concerning
industrial, commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply if the
beneficial owner of the royalties, being a resident of a Contracting
State, carries on business in the other Contracting State in which the
royalties arise, through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed
base situated therein, and the right or property in respect of which the
royalties are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or
Article 14, as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the
payer is a resident of that State. Where, however, the person paying the
royalties, whether he is a resident of a Contracting State or not, has
in a Contracting State a permanent establishment or a fixed base in
connection with which the liability to pay the royalties was incurred,
and such royalties are borne by such permanent establishment or fixed
base, then such royalties shall be deemed to arise in the State in which
the permanent establishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the
amount of the royalties, having regard to the use, right or information
for which they are paid, exceeds the amount which would have been agreed
upon by the payer and the beneficial owner in the absence of such
relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments
shall remain taxable according to the laws of each Contracting State,
due regard being had to the other provisions of this Convention.

Article 13. Capital gains

1. Gains or income derived by a resident of a Contracting State from the
alienation of immovable property referred to in Article 6 and situated
in the other Contracting State may be taxed in that other State.

2. Gains from the alienation of movable property forming part of the
business property of a permanent establishment which an enterprise of a
Contracting State has in the other Contracting State or of movable
property pertaining to a fixed base available to a resident of a
Contracting State in the other Contracting State for the purpose of
performing independent personal services, including such gains from the
alienation of such a permanent establishment (alone or with the whole
enterprise) or of such fixed base, may be taxed in that other State.

3. Gains derived by an enterprise of a Contracting State from the
alienation of ships or aircraft operated in international traffic by
that enterprise or movable property pertaining to the operation of such
ships or aircraft, shall be taxable only in that State.

4. Gains derived by a resident of a Contracting State from the
alienation of shares or comparable rights in a company, the assets of
which consist wholly or principally of immovable property as referred to
in Article 6 and situated in the other Contracting State may be taxed in
that other State.

5. Gains from the alienation of any property other than that referred to
in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting
State of which the alienator is a resident.

Article 14. Independent personal services

1. Income derived by an individual who is a resident of a Contracting
State in respect of professional services or other activities of an
independent character shall be taxable only in that State except in the
following circumstances, when such income may also be taxed in the other
Contracting State:a) if he has a fixed base regularly available to
him in the other Contracting State for the purpose of performing his
activities; in that case, only so much of the income as is attributable
to that fixed base may be taxed in that other Contracting State; orb)
if his stay in the other Contracting State is for a period or periods
exceeding in the aggregate 183 days in any twelve month period
commencing or ending in the fiscal year concerned; in that case, only so
much of the income as is derived from his activities performed in that
other State may be taxed in that other State.

2. The term “professional services” includes especially independent
scientific, literary, artistic, educational or teaching activities as
well as the independent activities of physicians, lawyers, engineers,
architects, dentists and accountants.

Article 15. Dependent personal services

1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages
and other similar remuneration derived by a resident of a Contracting
State in respect of an employment shall be taxable only in that State
unless the employment is exercised in the other Contracting State. If
the employment is so exercised, such remuneration as is derived
therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived
by a resident of a Contracting State in respect of an employment
exercised in the other Contracting State shall be taxable only in the
first-mentioned State if:a) the recipient is present in the other
State for a period or periods not exceeding in the aggregate 183 days in
any twelve month period commencing or ending in the fiscal year
concerned, andb) the remuneration is paid by, or on behalf of, an
employer who is not a resident of the other State, andc) the
remuneration is not borne by a permanent establishment or a fixed base
which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article,
remuneration derived in respect of an employment exercised aboard a ship
or an aircraft operated in international traffic by an enterprise of a
Contracting State may be taxed in that State.

Article 16. Director’s fees

Directors’ fees and other similar remuneration derived by a resident of
a Contracting State in his capacity as a member of the board of
directors or any other similar organ of a company which is a resident of
the other Contracting State may be taxed in that other State.

Article 17. Artistes and sportsmen

1. Notwithstanding the provisions of Articles 14 and 15, income derived
by a resident of a Contracting State as an entertainer, such as a
theatre, motion picture, radio or television artiste, or a musician, or
as a sportsman, from his personal activities as such exercised in the
other Contracting State, may be taxed in that other State.

2. Where income in respect of personal activities exercised by an
entertainer or a sportsman in his capacity as such accrues not to the
entertainer or sportsman himself but to another person, that income may,
notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the
Contracting State in which the activities of the entertainer or
sportsman are exercised.

3. Paragraphs 1 and 2 shall not apply to income from activities
performed by entertainers or sportsmen if such income is derived
directly or indirectly in a substantial manner from public funds of one
or both of the Contracting States, their political subdivisions or local
authorities.

Article 18. Pensions

Subject to the provisions of paragraph 2 of Article 19, pensions and
other similar remuneration paid to a resident of a Contracting State in
consideration of past employment shall be taxable only in that State.

Article 19. Government service1. a) Salaries, wages and other
similar remuneration, other than a pension, paid by a Contracting State
or a political subdivision or a local authority thereof to an individual
in respect of services rendered to that State or subdivision or
authority shall be taxable only in that State.b) However, such
salaries, wages and other similar remuneration shall be taxable only in
the other Contracting State if the services are rendered in that State
and the individual is a resident of that State who:(i) is a national
of that State; or(ii) did not become a resident of that State solely
for the purpose of rendering the services.2. a) Any pension paid by,
or out of funds created by, a Contracting State or a political
subdivision or a local authority thereof to an individual in respect of
services rendered to that State or subdivision or authority shall be
taxable only in that State.b) However, such pension shall be taxable
only in the other Contracting State if the individual is a resident of,
and a national of, that State.

3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries,
wages and other similar remuneration, and to pensions, in respect of
services rendered in connection with a business carried on by a
Contracting State or a political subdivision or a local authority
thereof.

Article 20. Students

Payments which a student, an apprentice or a trainee who is or was
immediately before visiting a Contracting State a resident of the other
Contracting State and who is present in the first-mentioned State solely
for the purpose of his education or training receives for the purpose of
his maintenance, education or training shall not be taxed in that State,
provided that such payments arise from sources outside that State.

Article 21. Other income

1. Items of income of a resident of a Contracting State, wherever
arising, not dealt with in the foregoing Articles of this Convention
shall be taxable only in that State.

2. The provisions of paragraph 1 shall not apply to income, other than
income from immovable property as defined in paragraph 2 of Article 6,
if the recipient of such income, being a resident of a Contracting
State, carries on business in the other Contracting State through a
permanent establishment situated therein, or performs in that other
State independent personal services from a fixed base situated therein,
and the right or property in respect of which the income is paid is
effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 or Article 14, as the case may
be, shall apply.

Article 22. Capital

1. Capital represented by immovable property referred to in Article 6,
owned by a resident of a Contracting State and situated in the other
Contracting State, may be taxed in that other State.

2. Capital represented by movable property forming part of the business
property of a permanent establishment which an enterprise of a
Contracting State has in the other Contracting State or by movable
property pertaining to a fixed base available to a resident of a
Contracting State in the other Contracting State for the purpose of
performing independent personal services, may be taxed in that other
State.

3. Capital represented by ships and aircraft operated in international
traffic by an enterprise of a Contracting State and by movable property
pertaining to the operation of such ships and aircraft, shall be taxable
only in that State.

4. All other elements of capital of a resident of a Contracting State
shall be taxable only in that State.

Article 23. Elimination of double taxation

1. In the case of Estonia, double taxation shall be avoided as follows:a)
Where a resident of Estonia derives income or owns capital which, in
accordance with this Convention, may be taxed in Switzerland, unless a
more favourable treatment is provided in its domestic law, Estonia shall
allow:(i) as a deduction from the tax on the income of that
resident, an amount equal to the income tax paid thereon in Switzerland;(ii)
as a deduction from the tax on the capital of that resident, an amount
equal to the capital tax paid thereon in Switzerland.Such deduction
in either case shall not, however, exceed that part of the income tax or
capital tax in Estonia, as computed before the deduction is given, which
is attributable, as the case may be, to the income or the capital which
may be taxed in Switzerland.b) For the purposes of sub-paragraph a),
where a company that is a resident of Estonia receives a dividend from a
company that is a resident of Switzerland in which it owns at least 10
per cent of its shares having full voting rights, the tax paid in
Switzerland shall include not only the tax paid on the dividend, but
also the appropriate portion of the tax paid on the underlying profits
of the company out of which the dividend was paid.

2. In the case of Switzerland, double taxation shall be avoided as
follows:a) Where a resident of Switzerland derives income or owns
capital which, in accordance with the provisions of this Convention, may
be taxed in Estonia, Switzerland shall, subject to the provisions of
subparagraph b), exempt such income or capital from tax but may, in
calculating tax on the remaining income or capital of that resident,
apply the rate of tax which would have been applicable if the exempted
income or capital had not been so exempted.b) Where a resident of
Switzerland derives dividends, interest or royalties which, in
accordance with the provisions of Article 10, 11 or 12, may be taxed in
Estonia, Switzerland shall allow, upon request, a relief to such
resident. The relief may consist of:(i) a deduction from the tax on
the income of that resident of an amount equal to the tax levied in
Estonia in accordance with the provisions of Articles 10, 11 and 12;
such deduction shall not, however, exceed that part of the Swiss tax, as
computed before the deduction is given, which is appropriate to the
income which may be taxed in Estonia; or(ii) a lump sum reduction of
the Swiss tax; or(iii) a partial exemption of such dividends,
interest or royalties from Swiss tax, in any case consisting at least of
the deduction of the tax levied in Estonia from the gross amount of the
dividends or interest or royalties.Switzerland shall determine the
applicable relief and regulate the procedure in accordance with the
Swiss provisions relating to the carrying out of international
conventions of the Swiss Confederation for the avoidance of double
taxation.c) A company which is a resident of Switzerland and which
derives dividends from a company which is a resident of Estonia shall be
entitled, for the purposes of Swiss tax with respect to such dividends,
to the same relief which would be granted to the company if the company
paying the dividends were a resident of Switzerland.

Article 24. Non-discrimination

1. Nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected
therewith, which is other or more burdensome than the taxation and
connected requirements to which nationals of that other State in the
same circumstances, in particular with respect to residence, are or may
be subjected. This provision shall, notwithstanding the provisions of
Article 1, also apply to persons who are not residents of one or both of
the Contracting States.

2. The taxation on a permanent establishment which an enterprise of a
Contracting State has in the other Contracting State shall not be less
favourably levied in that other State than the taxation levied on
enterprises of that other State carrying on the same activities. This
provision shall not be construed as obliging a Contracting State to
grant to residents of the other Contracting State any personal
allowances, reliefs and reductions for taxation purposes on account of
civil status or family responsibilities which it grants to its own
residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 7
of Article 11, or paragraph 6 of Article 12, apply, interest, royalties
and other disbursements paid by an enterprise of a Contracting State to
a resident of the other Contracting State shall, for the purpose of
determining the taxable profits of such enterprise, be deductible under
the same conditions as if they had been paid to a resident of the
first-mentioned State. Similarly, any debts of an enterprise of a
Contracting State to a resident of the other Contracting State shall,
for the purpose of determining the taxable capital of such enterprise,
be deductible under the same conditions as if they had been contracted
to a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or
partly owned or controlled, directly or indirectly, by one or more
residents of the other Contracting State, shall not be subjected in the
first-mentioned State to any taxation or any requirement connected
therewith which is other or more burdensome than the taxation and
connected requirements to which other similar enterprises of the
first-mentioned State are or may be subjected.

5. The provisions of this Article shall, notwithstanding the provisions
of Article 2, apply to taxes of every kind and description.

Article 25. Mutual agreement procedure

1. Where a person considers that the actions of one or both of the
Contracting States result or will result for him in taxation not in
accordance with the provisions of this Convention, he may, irrespective
of the remedies provided by the domestic law of those States, present
his case to the competent authority of the Contracting State of which he
is a resident or, if his case comes under paragraph 1 of Article 24, to
that of the Contracting State of which he is a national. The case must
be presented within three years from the first notification of the
action resulting in taxation not in accordance with the provisions of
the Convention.

2. The competent authority shall endeavour, if the objection appears to
it to be justified and if it is not itself able to arrive at a
satisfactory solution, to resolve the case by mutual agreement with the
competent authority of the other Contracting State, with a view to the
avoidance of taxation which is not in accordance with the Convention.

3. The competent authorities of the Contracting States shall endeavour
to resolve by mutual agreement any difficulties or doubts arising as to
the interpretation or application of the Convention. They may also
consult together for the elimination of double taxation in cases not
provided for in the Convention.

4. The competent authorities of the Contracting States may communicate
with each other directly, including through a joint commission
consisting of themselves or their representatives, for the purpose of
reaching an agreement in the sense of the preceding paragraphs.

Article 26. Exchange of information

1. The competent authorities of the Contracting States shall exchange
such information (being information which is at their disposal under
their respective taxation laws in the normal course of administration)
as is necessary for carrying out the provisions of this Convention in
relation to the taxes which are the subject of this Convention. Any
information so exchanged shall be treated as secret and shall not be
disclosed to any persons other than those concerned with the assessment
or collection of the taxes which are the subject of this Convention. No
information as aforesaid shall be exchanged which would disclose any
trade, business, banking, industrial or professional secret or trade
process.

2. In no case shall the provisions of this Article be construed as
imposing upon either of the Contracting States the obligation to carry
out administrative measures at variance with regulations and practice of
either Contracting State or which would be contrary to its sovereignty,
security or public policy (ordre public) or to supply particulars
which are not procurable under its own legislation or that of the
Contracting State making application.

Article 27. Members of diplomatic missions and consular posts

1. Nothing in this Convention shall affect the fiscal privileges of
members of diplomatic missions or consular posts under the general rules
of international law or under the provisions of special agreements.

2. Notwithstanding the provisions of Article 4, an individual who is a
member of a diplomatic mission, consular post or permanent mission of a
Contracting State which is situated in the other Contracting State or in
a third State shall be deemed, for the purposes of this Convention, to
be a resident of the sending State if:a) in accordance with
international law he is not liable to tax in the receiving Contracting
State in respect of income from sources outside that State or on capital
situated outside that State andb) he is liable in the sending State
to the same obligations in relation to tax on his total income or on
capital as are residents of that State.

3. The Convention shall not apply to international organisations, to
organs or officials thereof and to persons who are members of a
diplomatic mission, consular post or permanent mission of a third State,
being present in a Contracting State and not treated in either
Contracting State as residents in respect of taxes on income or on
capital.

Article 28. Entry into force

1. The Governments of the Contracting States shall notify each other
when the constitutional requirements for the entry into force of this
Convention have been complied with.

2. The Convention shall enter into force on the date of the later of the
notifications referred to in paragraph 1 and its provisions shall have
effect in both Contracting States:a) in respect of taxes withheld at
source, on income derived on or after the first day of January in the
calendar year next following the year in which the Convention enters
into force;b) in respect of other taxes on income, and taxes on
capital, for any fiscal year beginning on or after the first day of
January in the calendar year next following the year in which the
Convention enters into force.

Article 29. Termination

This Convention shall remain in force until terminated by a Contracting
State. Either Contracting State may terminate the Convention, through
diplomatic channels, by giving written notice of termination at least
six months before the end of any calendar year. In such event, the
Convention shall cease to have effect in both Contracting States:a)
in respect of taxes withheld at source, on income derived on or after
the first day of January in the calendar year next following the year in
which the notice has been given;b) in respect of other taxes on
income, and taxes on capital, for any fiscal year beginning on or after
the first day of January in the calendar year next following the year in
which the notice has been given.

In witness whereof, the undersigned, duly authorised thereto, have
signed this Convention.

Done in duplicate at Bern this 11th day of June 2002, in the Estonian,
German and English languages, all three texts being equally authentic.
In the case of divergence of interpretation the English text shall
prevail.

For the Government of the Republic of Estonia

For the Swiss Federal Council

Mart LAANEMÄE

Urs URSPRUNG

PROTOCOL

The Government of the Republic of Estoniaand

The Swiss Federal Council

Have agreed at the signing of the Convention for the avoidance of double
taxation with respect to taxes on income and on capital upon the
following provisions which shall form an integral part of the Convention.

1. ad Article 4 paragraph 3

It is understood that, as soon as both Contracting States have
introduced in their domestic legislations the place of effective
management as a criterion for the residence, then the wording of
paragraph 3 of Article 4 shall be replaced by the following provision:

“3. Where, by reason of the provisions of paragraph 1 a person other
than an individual is a resident of both Contracting States, then it
shall be deemed to be a resident only of the State in which its place of
effective management is situated.”

2. ad Article 6

Where the ownership of shares or other corporate rights in a company
entitles the owner of such shares or corporate rights to the enjoyment
of immovable property held by the company, it is understood that income
from the direct use, letting or use in any other form of such rights to
enjoyment constitutes income from immovable property.

3. ad Article 7 paragraph 3

It is understood that the term “expenses which are incurred for the
purposes of the permanent establishment” means those deductible expenses
directly relating to the business of the permanent establishment.

4. ad Article 11

a) In respect of paragraph 2 and 3 of Article 11 if in any Convention
for the avoidance of double taxation – or in any amendment to such
Convention – signed after the date of the signature of this Convention
between Estonia and a third state which is a member of the Organisation
for Economic Co-Operation and Development at the date of signature of
this Convention, Estonia agrees to exempt interest paid on any loan of
whatever kind granted by a bank or interest paid with respect to
indebtedness arising on the sale on credit, by an enterprise, of any
merchandise or industrial, commercial or scientific equipment to another
enterprise which is related to the first-mentioned enterprise, or to a
lower rate of tax on such interest than the rate provided for in
paragraph 2 of Article 11, then such exemption or lower rate shall
automatically apply under this Convention if it were specified in
Article 11 with the effect from the date on which the provisions of that
Convention or amendment, as the case may be, or of this Convention,
whichever is the later, become effective.

b) Ad paragraph 3 c

It is understood that the term “institution acting on behalf of the
State, political subdivision or local authority” means any institution
whose relevant status is certified by the competent authority of its
state of residency.

5. ad Article 12

If in any Convention for the avoidance of double taxation – or any
amendment to such convention – signed after the date of signature of
this Convention by Estonia and the third State which is a member of the
Organisation for Economic Co-Operation and Development at the date of
signature of this Convention, Estonia agrees to a definition of
royalties which excludes any rights or other property referred to in
paragraph 3 or to exempt royalties arising in Estonia from Estonian tax
on royalties or to lower rates of tax then the rates provided for in
paragraph 2, then such narrower definition, exemption, or lower rates
shall automatically apply under this Convention as if they were
specified respectively in paragraph 3 or paragraph 2 with effect from
the date on which the provisions of that Convention or amendment, as the
case may be, or of this Convention, whichever is the later, become
effective.

6. It is understood that the resident of a Contracting State who
is, under the laws of that State, not entitled to the benefits of a
convention for the avoidance of double taxation, may claim neither any
relief provided for in this Convention with respect to taxes levied in
the other Contracting State nor, pursuant to Article 23 of this
Convention, any deduction of, or exemption from, the taxes of the State
of which he is a resident.

Done in duplicate at Bern this 11th day of June 2002, in the Estonian,
German and English languages, all three texts being equally authentic.
In the case of divergence of interpretation the English text shall
prevail.